A state job versus the private sector

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Q. I have been offered a job with the state of New Jersey. I am 53. The pay isn’t great but there are good benefits. Should I take it or stay in the private sector? Also, is the PERS pension at age 65 no matter how many years of service you have or after 25 years only?
— Contemplating

A. Congrats on the job offer. Any time you make a change there’s a lot to consider.

The first thing to look at is your pay, said Gerard Papetti, a certified financial planner and certified public accountant with U.S. Financial Services in Fairfield.

See how much less will your pay be with the state job versus a private sector job.

Then, how do the benefits compare?

Papetti said you should consider medical, dental, Flexible Spending Accounts and Health Savings Accounts, life and disability insurance and even vacation days. Then look more closely at retirement plans with or without employer matches and any pension plan offerings.

“Many times, although the pay may be greater in the private sector, the benefits package of a public sector job outweigh the lower salary,” Papetti said.

Of course, a job change isn’t only about the money.

Consider which job may be more rewarding and interesting to you, what advancement opportunities each job has, and what your commute and working hours would be for both.

Now, the pension question.

There are many tiers to the PERS pension system, and this should be a key part of your decision.

“PERS actually provides a retirement benefit after 10 years of service,” Papetti said. “The 25 years you reference relates to members who elect early retirement and their benefit will be reduced based on the age of their early retirement as well as the membership tier.”

As for retirement at age 65, Papetti said, if your retirement is considered a “Service Retirement,” then regardless of years of service, it depends on what membership tier you are. Once you reach the minimum age requirement for your tier, you would apply a formula provided by PERS to determine what percentage of your final pay you will receive as a pension benefit.

You can learn more here.

Email your questions to moc.p1555976574leHye1555976574noMJN1555976574@ksA1555976574.